Brent crude ticked higher on Thursday but remained below $65 per barrel, and not far above five-year lows hit in the previous session, with the market’s bearish tone largely intact.
Comments by the Saudi Arabian oil minister shrugging off an output cut on Wednesday renewed worries about a global glut that has slashed prices by more than 40 per cent since June.
Brent crude edged up 51 cents to $64.75 by 0325 GMT, a little more than a dollar away from the previous session’s low of $63.56 - the weakest since July 2009. The benchmark had closed down almost 4 per cent on Wednesday.
A $40 fall in oil shifts $1.3 trillion, 2% of world output, from oil producers to consumers. Good for China, India, Taiwan says Bloomberg— lokeshwarri sk (@lokeshwarri) >December 11, 2014
“This is a bit of a return to a more normal pattern of trading for us in this time zone,’’ Michael McCarthy, chief market strategist for CMC Markets in Sydney, said of the gains in early trading.
“Often we reverse the overnight moves as the shorter-term trading interests take a profitable cut out of their positions.’’
US crude rose 47 cents to $61.41, after sharp losses of almost 5 per cent in the previous session, its biggest daily drop in almost two weeks. It also hit a near 5-1/2 year low, of $60.43, on Wednesday.
The US benchmark came under pressure as crude inventories in the country rose unexpectedly last week, data from the Energy Information Administration showed.
Crude stocks rose by 1.5 million barrels in the week to Dec. 5, compared with analysts' expectations for a 2.2-million-barrel draw.
Battle for market share
Traders are now eyeing an increasingly competitive battle for market share among OPEC exporters, for clues on when and at what price they would step in to help balance the oil market.
Leading the challenge is Kuwait, which has set the official selling price for its crude sales to Asian buyers for January at $3.95 a barrel below the average of Oman/Dubai quotes, a trader said, the lowest it has been since December 2008.
Global demand for OPEC crude in 2015 is expected to fall to its lowest in more than a decade and far below current output, the group had said on Wednesday, indicating a hefty supply surplus without OPEC output cuts or a slowdown in the US shale boom.
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